The State of Illinois can’t pay its bills — literally. Without a budget for the new fiscal year, the state’s bank account is frozen (with some exceptions). Those receiving various social services from the state — generally the poor or otherwise challenged — have already been hit hard. Soon, state workers will miss paychecks. And we all will feel the pain as services that we count on start disappearing.

Chris Mooney, Director of the Institute of Government and Public Affairs at the University of Illinois, breaks it down.

Chris Mooney talks with Sean Crawford

With apologies to David Letterman, here are “The Top 10 Reasons Why the State of Illinois Is in its Current Financial Stalemate.”

#10. Failure to adjust significantly after 2008

Almost every state was in deep deficit after the 2008 market crash and recession. Most states undertook tough tax increases and budget cuts that put them on an even keel with the recovery. The Illinois budget was cut and the income tax was raised, but only temporarily. When that 2011 increase disappeared last January, the budget picture turned bleak again.

#9. A tax system out of sync with the modern economy

Our sales tax rate is high, and its base is narrow. Our flat income tax doesn’t yield the increased revenue that progressive systems do with greater productivity. We rely very heavily on property taxes to fund our schools. Our motor fuel taxes are set at a fixed number of cents per gallon that not only don’t rise with inflation, but generate less revenue with today’s better-mileage vehicles.

#8. Pension payments are easy to put off

Policymakers (and the voters who elect them) prefer current spending to saving for the future. This has led to a staggering $100+ billion difference between what we owe our current and former public employees for their retirement and what the state has put away for it.

#7. Strict pension language in the state Constitution

Public pensions are “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” In May, the state Supreme Court strongly affirmed this constitutional restriction when it overturned the 2013 pension reform, essentially telling the state to “pay up.”

#6. Tough non-budgetary demands

Gov. Bruce Rauner has tied a variety of reform proposals to budget negotiations. Fair enough — he’s a governor with strong policy views. But these controversial proposals make budget compromise more difficult. Some of these items — like term limits and redistricting reform — are tantamount to asking the Democratic power structure to cut off its own head. Not an easy ask.

#5. Gubernatorial “union bashing”

Rauner toured the state preaching the right-to-work gospel last winter and spring. This is an existential issue for unions, and they and their Democratic allies have been energized in opposition, further poisoning the budget negotiations waters. Ironically, few believe that right-to-work is likely to become law in Illinois.

#4. National ambitions?

Some observers have jumped to the conclusion that Rauner has his sights set on the White House. As a GOP governor of a largely Democrat state who is “taking on the unions,” the scenario is not implausible. But having a governor with national ambitions is a mixed blessing, at best. Ask your friends in Wisconsin, New Jersey, and Louisiana.

#3. A “doubly new” governor

Any newly elected governor is going to be tested by the General Assembly. But as a rookie to government and an unknown quantity to his negotiating partners, Rauner truly is a wild card. Legislative leaders don’t know his motivations, his modus operandi or his bottom lines, making negotiation difficult.

#2. Challenging the “alpha dog”

House Speaker Mike Madigan has held his position for decades and is used to winning. He has power, and he is darned good at his job. But today, he faces a new governor with uncertain incentives, strategies and goals and who has essentially unlimited resources — and who is also used to winning. This is a recipe for an all-out brawl.

#1. Years of poor financial management

Even aside from the pension problem, in recent years policymakers have carried over deficits, delayed payments, used one-time money, and resorted to other budgetary tricks to get from one fiscal year to the next. Simply put, this comes from a short-sighted focus on the next election. The result has been a huge structural deficit that no longer can be ignored. Fixing this requires service cuts and tax hikes, neither of which anyone likes — least of all legislators who have to explain them to voters.

Illinois’ policymakers face a very difficult problem under very difficult circumstances. But solve it they must and they will. The only questions are when they will do so and how the resulting pain will be distributed.

Christopher Z. Mooney is director of the Institute of Government and Public Affairs at the University of Illinois

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Apparently the legislature is broken, the various committees are not much more than a group of bullies rather than evaluators and advisors which is what I believe their jobs should be. They recently attempted to tear into the Department of veterans affairs head about spending. This report tells how VA chief Bob McDonald replied.

VA Chief Counterpunches Over ‘Community Care’ Costs

The Veterans Choice, Access and Accountability Act of 2014, which Congress rushed to pass last summer to address a patient wait-time scandal at dozens of VA hospitals and clinics, spurred VA to broaden access to care.

Turns out it did so largely through use of existing and often costly contract authorities and partnerships for non-VA health care with local communities rather than the new, more complex Choice Card plan.

The result was seven million new health care appointments for veterans the past year, but also a flood of new enrollees into VA care, an accounting nightmare for health care administrators and a surprising budget shortfall, which VA officials concede they failed to forecast and which angry lawmakers realize they must repair before going on August recess.
If not, VA leaders warn, VA medical facilities will shut their doors.

VA Secretary Bob McDonald came before the Veterans Affairs Committee on Wednesday to explain why VA needs emergency authority to shift $3 billion from an account fenced for the Choice Card program, and use it instead for other burgeoning community care costs, plus a $500 million tab VA faces to buy new wonder drugs for treatment of late-stage Hepatitis C.

If denied flexibility to access Choice fund, McDonald said, “we will have no option at the end of July but to defer all remaining non-Choice-care-in-the-community authorizations until October, provide staff furlough notices, and notify vendors we cannot pay them as we begin an orderly shutdown of hospitals and clinics across the country.”

McDonald issued his blunt warning knowing he had support of the nation’s largest veteran service organizations for the funding shift. VSO leaders had written in the past week to Rep. Jeff Miller (R-Fla.) and other chairmen and ranking members of key congressional committees, urging swift transfer of funds to avoid any interruption in veterans’ health services. They largely praised McDonald for expanding access to care without regard to cost.

By Tuesday, Miller and Rep. Charlie Dent (R-Pa.), chairman of the appropriations subcommittee on military construction and veterans’ affairs, released a joint statement citing “blatant mismanagement” at VA for the surprise budget shortfall. But they added their assurances “that no veterans will be denied the care they need and deserve.”

Two weeks ago, they angrily added, the VA “couldn’t tell Congress it would be shutting down hospitals next month. No viable organization can function this way. The VA’s continued lack of transparency and refusal to be forthright with Congress and the American people is unacceptable.”

Miller continued to disparage McDonald and his team in opening his hearing, saying “never before can I recall VA — or any agency — completely exhausting its operational funds prior to the end of the fiscal year, with the consequences for VA being the cessation of hospital operations.”

Though vowing to protect veterans once more from VA management failures, Miller also warned “the days when VA can come to Congress and just say ‘Cut us a check’ are gone.”

McDonald was unapologetic. He said Congress shares blame for the budget shortfall. It passed the Choice Act promising to reduce veterans’ wait times for care, so McDonald decided to manage his department to address those pressing care requirements rather manage to a hobbled budget.

Still, he said, VA would have been able to give more timely warning of a budget shortfall except for another provision of Choice Act that forced VA to consolidate accounting processes for seven different community care programs under a single central office. That hampered VA’s ability to track rising non-VA or community care costs using regional budget expertise resident at VA medical centers, even as those centers were urged to refer many more patients to outside providers to ensure timely access to care.

“When you passed the Choice Act you demanded…that we account for care in the community in a different way than we did previously,” McDonald said. “You asked us to centralize that at our business office. I’m sure you did that to keep control of that money and make sure we weren’t spending it for something else.” But “it helped to exacerbate the situation,” McDonald said.

Without medical centers monitoring community care costs, “we lost a lot of intelligence about the obligations that were being made,” added Dr. James Tuchschmidt, VA’s principal deputy under secretary for health. Those regional experts even knew how to use VA’s “clunky” financial management system, he said. “And when we centralized that, maybe we should have anticipated some of the problems. But we didn’t.”

Instead, as VA began buying an “unprecedented volume of care” from caregivers in local communities, VA authorizations for such care were being loaded onto one computer system and cost obligations being incurred were tracked on a different system, Tuchschmidt said.

“We tried through brute force to keep that accounting whole so that we could understand what’s going on,” McDonald said. “But there’s no question that we’ve got to do a better job.”

Before Congress added the Choice program last year, VA already operated six other programs under separate authorities to provide patient access to outside care, including its Patient Centered Community Program (PC3) and Project Arch (Access Received Closer to Home), a pilot program for expanding access to health care for veterans in rural areas.

What makes Choice unique is veterans living more than 40 miles from a VA medical facility or facing waits for VA care longer than 30 days get to decide themselves to use outside care. McDonald said that makes VA budgeting more unpredictable, particularly as Congress has insisted on keeping Choice dollars separate from other VA health care funding needs.

Some committee members conceded that would have to change. Meanwhile, McDonald counterpunched every charge from irate lawmakers, mostly Republicans, that mismanagement had created a VA budget crisis.

The simple fix VA proposes, he said, is to use “part of the $10 billion that’s already been appropriated by Congress for care in the community — to pay for care in the community. That’s the lunacy of why we are here talking about this.”

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Abel Oldsworth, my reticent friend, wonders why some presidential candidates and Congressmen contend that we would be safer if we had stayed in Iraq longer, deployed more fighting troops now , and the nuclear treaty with Iraq.. Most people agree that the US could not overcome with money or negotiations the deep centuries old religious schisms, hatreds, and abuses that fuel the current wars throughout the Middle E ast. Is that now achievable? Should we not give peace a chance and approve the treaty?

A recent study indicates the Iraq war cost 2 trillion dollars, all from borrowed money, 4488 US soldiers were killed, 32,223 wounded, 134,000 civilians were killed, and 2.5 million displaced. Do we want to add to these totals? Our role there seeks not only military preparedness but also Shite and Sunni cooperation in the fight against ISLS. That cooperative relationship has to evolve to sustain to unified efforts. How much can we help on this front? Do we want to see more of our young men killed and wounded?

A 90 year old man who happens to be the former Speaker of the US House was denied a voter ID according to Texas’s new voter ID requirements.

FORT WORTH — Former House Speaker Jim Wright was denied a voter ID card Saturday at a Texas Department of Public Safety office.“Nobody was ugly to us, but they insisted that they wouldn’t give me an ID,” Wright said.

The legendary Texas political figure says that he has worked things out with DPS and that he will get a state-issued personal identification card in time for him to vote Tuesday in the state and local elections.

Because a 90 year old man is trying to game the system, right?

But here is the real problem:

But after the difficulty he had this weekend getting a proper ID card, Wright, 90, expressed concern that such problems could deter others from voting and stifle turnout. After spending much of his life fighting to make it easier to vote, the Democratic Party icon said he is troubled by what he’s seeing happen under the state’s new voter ID law.“I earnestly hope these unduly stringent requirements on voters won’t dramatically reduce the number of people who vote,” Wright told the Star-Telegram. “I think they will reduce the number to some extent.”

Wright and his assistant, Norma Ritchson, went to the DPS office on Woodway Drive to get a State of Texas Election Identification Certificate. Wright said he realized earlier in the week that the photo identifications he had — a Texas driver’s license that expired in 2010 and a TCU faculty ID — do not satisfy requirements of the voter ID law, enacted in 2011 by the Legislature. DPS officials concurred.

Not everyone will have the resources, or knowledge, that Wright has to overcome these obstacles. And Wright puts it very well:

We want to make sure that every eligible Texan who wants to cast a ballot can,” Pierce said. “We want to help any Texan who needs additional information.”Wright, who said he has voted in every election since 1944, lamented that such help is called for.

“From my youth I have tried to expand the elections,” Wright said. “I pushed to abolish the poll tax. I was the first to come out for lowering the voting age to 18.”

The state put up these obstacles in the firstplace- now they are ‘concerned’ to make sure everyone can overcome them. They have ‘solved’ non-existent voter fraud problems by creating actual problems.9:59 AM PT: For help with getting Voter ID the linked article suggests:

For more information, voters may call the Texas secretary of state’s office at 800-252-VOTE (8683) or the Tarrant County Elections Office at 817-831-VOTE (8683). Go online for more information at http://www.tarrantcounty.com/evote or votexas.org.

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The ongoing controversy over the Iran Nuclear agreement is another example of talking heads who have not read the agreement but have thoughts about it and it’s effectiveness. Lets look at some obvious facts:if Iran wanted to attack Israel, they could have done it anytime. This agreement was not all Obama, there were other countries involved including Russia and China. The terrorists of the world will and can go after any country. The US, Israel, Britain and even China and Russia are not the only targets. Most People including our Congress attempt to make this Agreement more simplistic than it is. The bigger issue is to get some relief for The Iranians who are as ordinary as we are and have suffered the most under the sanctions-these are not the Terrorists. We have to understand that even though the middle east’s population is essentially related through some ancestry from eons ago and the various sects have different interpretations of the same Bible (Quran-Torah) which is essentially the old testament. As far as the “hostages”, this agreement had to be made in order to begin the talks on release of hostages or prisoners, there has to be a certain amount of normalcy to begin those talks and they cannot be tied to talks about Nuclear issues. There are not now and never will be any guarantees on any deals, agreements or pacts with any country friend or foe, just the hope that calmer heads will prevail if something untoward happens. We must remember that we are not only country who is nervous about Iran but this is the world we live in and if we wanted to end the threat we would have to take out the entire population to be sure we got the bad guys. To make another point-look what we did to the Native Americans, look at what Britain did to India and Africa and what Russia did to Ukraine. What it comes down to is that we as a Country took the lead and no matter what we are in the process of rebuilding a coalition that was destroyed when we put the Shah in power in the 50’s. Our big money companies and power brokers are as responsible for the Middle East problems as the residents of that area. These are the people who support “their candidates” for office and continue to pull their strings once they are elected. The multibillionaire faction has one purpose and that is to rule the government and do whatever they can to assert their advantage. Our ( the voters) wages pay these big money people indirectly because we buy their products and with those profits they buy our elected officials and use them against us. There was a 50’s TV show that had a line that went like this” “Remember, there are people who will pat you on the back with one hand and pick your pocket with the other”. This aptly describes many of the people we have elected from local to Federal offices.

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Pope Francis’ Popularity Declines in the US

By Elizabeth Goldbaum22 hours ago

Pope Francis’ popularity among Americans may be waning, according to a new Gallup poll.

The pontiff’s favorability rating in the United States has dropped from 76 percent in early 2014 to 59 percent this month, Gallup reported this week. This 17 percentage-point decline puts his approval rating close to the 58-percent rating he received in April 2013, soon after he became pope.

For the most part, Catholics and political conservatives — two groups that remain most devout to the modern papacy — drove the rating down. Among these groups, 71 percent of Catholics think of Pope Francis favorably, compared to 89 percent last year. Moreover, 72 percent of conservatives approved of the pope last year, whereas only 45 percent approve of him now. [Papal Primer: History’s 10 Most Intriguing Popes]

Although the new survey results suggest many Americans are shifting their favor away from the pope, a rising number reported not knowing him well enough to rate him. In fact, one-quarter of Americans today say they have never heard of the pope or have no opinion of him, compared to 16 percent in 2014. This lack of opinion contributes to the overall decline in favorability, according to Gallup representatives.

Too progressive, too quickly?

Pope Francis, who serves as the religious leader for 1.2 billion Catholic people around the world, has focused his papacy on issues that involve protecting the poor, strengthening interfaith religions, respecting gay and lesbian members of the church, and making environmental conservation a priority.

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In this photo taken on Sunday, July 12, 2015, Pope Francis smiles as he meets the media

The pope’s decline in favorability among conservatives may result from his denouncement of “the idolatry of money” and his support for the science behind human-caused climate change — two beliefs that often conflict with conservative political views.

However, the pope may not be progressive enough for liberals, a group that also reported a drop in favorability by 14 percentage points — from 82 percent in 2014 to 68 percent now. Liberals have taken issue with the pope for not allowing the ordination of women as priests and for continuing to prohibit priests from marrying.

But Pope Francis’ favorability among Americans may rise again soon, with his first planned visit to the United States in September. The pope will make stops in New York, Philadelphia and Washington, D.C., and will be the first pontiff to address a joint session of Congress.

Americans can be somewhat fickle in their admiration of the pope, history shows. When Pope John Paul II, who led the Roman Catholic Church from 1978 to 2005, visited the United States in 1993 and 1999, he was rewarded with a boost in popularity. Similarly, when Pope Benedict, who preceded Pope Francis as pontiff from 2005 to 2013, visited the U.S. in 2008, he reached his highest favorability rating among Americans.

The Gallup poll gathered data from telephone surveys conducted from July 8 through July 12, 2015. The poll included 1,009 adults ages 18 and older living in all 50 states and the District of Columbia.

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Did it occur to anyone to question the birth place of Ted Cruz? Mr. Cruz is a naturalized American citizen , born in Canada. He became a member of Congress but no one has ever questioned his birth credentials yet a Black man, campaigning for the Presidency and born in the United States was heavily questioned until his “long form” birth certificate was produced, if that’s not Racism-I don’t know what is! -My opinion, pundit 42. This posting from Meredith Shiner tells a lot.

Ted Cruz tries to pull Trump card on Senate floor

TV In No Time

Ted Cruz Lambastes Most Powerful Republican in Senate

During a speech on the floor, Republican Senator and presidential candidate Ted Cruz took on one of the most powerful individuals in his own party, Senate Majority Leader Mitch McConnell. Senator Cruz is incensed that Senator McConnell allegedly struck a deal to allow an amendment to a must-pass highway-funding bill. The amendment would pave the way for the reauthorization of the Export-Import Bank, which Cruz and his colleagues recently blocked. This accusation by Senator Cruz is especially shocking because Senate rules state that no senator *quote* “shall impute to another senator… any conduct or motive unworthy or unbecoming a senator.” Senator Cruz, who has had many public battles with Senator McConnell, chastised him, saying he’s more interested in listening to lobbyists than he is voters.

Republican presidential candidate Sen. Ted Cruz, R-Texas, did his best Donald Trump impersonation Friday, dramatically calling out his own party leader as a “liar.”

It’s been almost impossible for most of the Republican presidential hopefuls to get any airtime since Donald Trump transformed the cable news networks into his latest unavoidable “Trump” billboard, so on Friday, Sen. Ted Cruz, R-Texas, took an unusual step to bolster his conservative credentials and wrestle the spotlight back in his direction: He called his own party leader a “liar.”

Repeatedly.

Cruz’s message on the Senate floor was on a complicated topic of little interest except to the most hardened partisans: He accused Senate Majority Leader McConnell, R-Ky., of lying to him and other senators about offering an amendment on the controversial-among-conservatives Export-Import Bank, a government agency that provides financing to American companies trying to send goods abroad that might not get loans from private banks. The authorization for the bank has already expired, and Republicans would like to make sure it’s not renewed. But the Senate now is gearing up to vote Sunday on an amendment to revive the bank as part of its consideration of a long-term transportation bill currently before it.

If the actual issue is down in the legislative weeds, Cruz’s delivery and intention could not have been more geared to the broad media spotlight. Cruz dramatically accused McConnell of breaking a promise to him but also of being beholden to special interests and no better for conservative interests than his Democratic predecessor.

“Today is a sad day for this institution,” Cruz said, opening what would become a 20-minute tirade on the floor. “The Senate operates based on trust. Whether we are Democrats or Republicans, these 100 senators have to be able to trust that when a senator says something, he or she will do it. Even if we disagree on substance, that we don’t lie to each other.

“The majority leader looked me in the eye, and looked 54 Republicans in the eye. I cannot believe he would tell a flat-out lie. And I voted based on those assurances that he made to each and every single one of us,” he continued. “What we just saw today was an absolute demonstration that not only what he told every Republican senator but what he told the press over and over and over and over again was a simple lie.”

Of course, it has been long expected McConnell would offer a vote on Export-Import Bank reauthorization before August, and as recently as Tuesday the leader said he planned to allow a vote on the agency as part of the process of voting on the pending transportation legislation.

Just as striking is that Cruz recently said he’s “not interested in Republican-on-Republican violence,” when asked to condemn Trump’s remarks disparaging undocumented immigrants from Mexico. Yet he used the words “lie” and “lying” five times over the course of several minutes Friday — a once-verboten move in the staid institution of the Senate — about another Republican.

It revealed a truth about Cruz: He wasn’t interested in avoiding a confrontation wtih Trump just because Trump is a fellow Republican. Cruz was interested in defending a conservative whose supporters could be up for grabs later on in the campaign, because criticizing other GOP politicians is old hat.

The attack on McConnell Friday is just the latest example of Cruz’s campaign against Republican authority, a campaign that has been successful for him at the grassroots level since he was elected to Congress in 2012 but that now sees a crowded field of other conservatives vying for the same space.

Now that an even more attention-grabbing critic than he has come on the playing field, the question is whether Cruz’s accusation of congressional double-crossing about a failed amendment can compete with Trump’s trips to the U.S.-Mexico border and near-constant cable news grandstanding.

Cruz tried to turn his complaint about the Export-Import Bank into a larger point about politics, saying that establishment Republicans like McConnell are no better than Democratic leaders like Harry Reid of Nevada.

“You know who doesn’t have lobbyists? A factory worker who just wants to work and provide for his or her children. They don’t have lobbyists. And so what happens? Career politicians in both parties gang up with giant corporations to loot their taxes and make it harder for people who are struggling to achieve the American dream,” Cruz said. “Coal miners … they don’t have lobbyists who are representing them here, the individual miners, while the majority leader teams up with the Democratic leader to take from their paychecks to fund giant corporations. It is wrong, and it is corrupt.”

He also claimed McConnell’s vote on repealing Obamacare, which is scheduled to happen with the bank vote, was an “empty” gesture because he would not allow a vote on a Cruz amendment that would take away employer contributions to congressional workers’ health care plans. McConnell “doesn’t want to end the cronyism for members of Congress any more than end the cronyism for giant corporations who enrich themselves at the expense of the American people.”

Cruz’s performance on Friday could be a preview for his plans this fall, however, as government funding is set to expire in September, and Cruz’s Senate incumbency provides him at least one advantage over other conservatives: He can literally threaten government shutdown in the name of his conservative bonafides and as a tool to fundraise. Which is what he did in 2013.

No matter how Cruz attempts to proceed, he’s certainly torched what remaining goodwill he had with his own leader — if there was any — and he’s unafraid to wage a personal “us versus them” war within the walls of the Senate chamber, when “them” is his own colleagues.

It makes for interesting political theater, but maybe still not as interesting as Trump’s.

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The mess that is America erupted in a clash between 2 radical groups, one Black and one white. This is the only country where freedom of speech and expression is universal even when those actions are not universally popular or accepted. The extremeness of the hate and vitriol went viral over social media and the news. These recent actions are the result of the Confederate battle flag being removed from a Southern State capitol. The controversy took on a life of its own when Historians and Extremely “biased” spoke out against the removal but for different reasons. The “EB’S” consider it a symbol of their “Whiteness and privilege” while the Historians consider it a part of Confederate history as it relates to relatives who served in the Civil war. Whoever is Correct(?)the dustup show that there are still pockets of Radical Racism which are violent and potentially dangerous to non white residents of this country. Is it just me or has the Covert Racism of the United States emerged full-blown after the election of a Black man to the Presidency of the United States? This phenomenon(?) has been exacerbated by our high placed political leaders(?) who use the racial fears of their constituents to keep their offices and push their agendas which help no one but them selves and their big money donors. America was founded by immigrants who over time “stole” the lands and resources from the “Native Americans” but that was OK or made Ok by the powers in the Government. That is similar or the same as the Government sanctioned segregation of years ago and still covertly occurs today. So today in 2015 we are fighting the civil war, a race war and a political war all of which are fueled by folks whose sole purpose is to keep the uneasiness between Races and people in general in order to maintain control of the Government by way of electing purchasable officials. So I have to ask: When will we belong?

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Comments Off on Shareholders sue Sears over ‘unfair deal’ they say will benefit the CEO while killing the company

This article from June 2,2015 shows the imminent demise of Sears and Kmart.

CHICAGO — A shareholder class action lawsuit has been filed against Sears Holdings alleging the company’s plan to sell its prime real estate holdings to a trust controlled by CEO Eddie Lampert would strip the struggling retailer of one of its last remaining valuable assets, leaving it a debt-laden, money-losing renter in its own stores.

The proposed $2.5 billion sale, the suit says, will benefit Lampert at the expense of shareholders and hasten the demise of Sears, once a quintessential American retailer.

“The proposed transaction is a financially and structurally unfair deal,” the lawsuit says. “Sears and its stockholders would receive a severely inadequate cash payment that the defendant Lampert-controlled company may use to cover operating losses and debt obligations for another year or so, before stockholders are left holding the bag in an insolvency widely viewed as inevitable if the proposed transaction occurs.”

The proposed transaction would sell 254 Sears stores to Seritage Growth Properties, a real estate investment trust created by Sears Holdings. Lampert, a hedge fund billionaire who owns 49 percent of Sears Holdings, would control both the retailer and the newly formed REIT. The transaction is expected to close this month, with Seritage leasing the stores back to Sears at a cost of $150 million to the retailer in the first year.

The lawsuit, filed late Friday in Delaware Chancery Court, names Lampert, Sears Holdings, Sears board members and Seritage as defendants. It seeks to stop the proposed transaction, saying the $2.5 billion purchase price is a “paltry” amount that in the face of ongoing operating losses makes imminent insolvency a likely outcome for Sears, based in the Chicago suburb of Hoffman Estates.

“The complaint contains numerous factual misstatements and is legally without merit,” Chris Brathwaite, a Sears spokesman, said in a statement. “The company plans to contest it vigorously and believes the proposed real estate investment trust transaction will provide substantial benefits to Sears Holdings and its shareholders.”

The suit was brought on behalf of Sears shareholder John Solak by Robbins Arroyo, a San Diego-based law firm.

Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm, was not surprised that the proposed sale-leaseback transaction would concern existing Sears shareholders, given Lampert’s controlling interest in both the buyer and seller. “Shareholders don’t want to be played for chumps,” Johnson said. “They’re rightfully guarding their interests.”

The retailer has seen its sales decline since Lampert combined Sears and Kmart in an $11 billion deal in 2005. The company reported losses of $1.7 billion last year, with revenue declining nearly 14 percent to $31.2 billion.

Sears Holdings closed 234 stores last year. At the end of its fiscal year Jan. 31, Sears Holdings operated 1,725 stores, including Sears, Kmart and Sears Auto Centers, 684 of them in properties it owns. That’s down from 3,949 stores at the end of its 2010 fiscal year.

In recent years, the company has spun off assets including Orchard Supply Hardware and Sears Hometown and Outlet stores, as well as Wisconsin-based Lands End, one of the few bright spots in the Sears Holdings portfolio.

The proposed sale, announced April 1, would transfer some of the best-performing Sears and Kmart stores to the real estate trust, the lawsuit says. As part of the transaction, the REIT has the right to capture half of the store space in the properties to rent to other tenants, shrinking the footprint of Sears and Kmart stores. Consumer electronics may disappear from some stores as they get smaller.